Gogo has announced its financial results for the third quarter ended September 30, 2018 showing a consolidated revenue increase to $217.3m, but a net loss of $37.7m.
It says the loss is an improvement of 17% from the prior-year period, primarily related to the continued strong performance of its business aviation segment.
Adjusted EBITDA increased to $21.1 million, up 63% from $13 million in Q3 2017. Capital expenditures decreased to $9.2 million in Q3 2018 from $68.5 million in Q3 2017.
Oakleigh Thorne, Gogo’s President and CEO, said: “Gogo’s third quarter results demonstrated solid financial and operational performance.
“In our commercial aviation business, we have installed nearly 1,000 2Ku aircraft and strong 2Ku performance is driving customer satisfaction and higher take rates.”
In an investors’ conference call Thorne said, excluding American Airlines, inflight connectivity take-rates have reached 14%.
“In our business aviation segment, strong AVANCE equipment sales are setting the stage for continued service revenue growth,” Thorne said.
Total revenue for its business aviation business increased to $73.6m, up 22% from Q3 2017.
Strong sales of Gogo’s AVANCE L5 and L3 systems drove sales of air-to-ground units to 296 in Q3 2018, up 41% from the prior-year period.
Total revenue for its Commercial Aircraft, North America business unit, increased to $108.5m, up 13% from Q3 2017. It said aircraft online decreased to 2,712, down 4% from 2,817 in Q3 2017, due to the de-installation of American Airlines aircraft during Q3 2018.
In its Commercial Aviation, Rest of World business segment, total revenue increased to $35.2m, up from $16.6m in Q3 2017. Aircraft online increased to 513, up 161 from Q3 2017.
But he said that its install guidance has been reduced to 450-500 installs for 2018 due to a variety of different reasons.
“The key to success with our commercial Rest of World business will be to ensure our 2Ku performance mirrors what we have already achieved,” Thorne said.
With respect to the problems Gogo experienced with de-icing fluid getting under the 2Ku radome and causing issues last winter, Thorne said it had developed a number of solutions to solve the problem.
The first is a modification to the fuselage/radome seal and 72% of North American aircraft have now been fitted with the modification. Gogo also has a modification to the deflector/bottom cover and may also roll out a top cover modification if need be, but that requires further testing.
On the question of Ku-band versus Ka-band Thorne said: “To me the proof is in the doing. We service 700 satellite flights a day, delivering 15Mbps speeds.
“It would be hard to do that with Ka today in parts of North America. We are not opposed to Ka, but we don’t think we will be moving there soon.
“We think it is important to be agile and that is why we have developed an open and modular approach. We have been very successful with this strategy and proven our agility.”
Thorne said Gogo will continue to use the best technology for the task.
Overall, Gogo said its highlights were:
- It delivered solid 2Ku system performance, with 97% availability for the third quarter.
- Cathay Pacific and Air France launched their commercial 2Ku services.
- Bombardier delivered commercial aviation’s first ever line-fit aircraft, an Airbus A220, to Delta Air Lines; the aircraft is 2Ku enabled and includes Gogo Vision Touch, its new wireless seatback inflight entertainment system.
- Gogo TV is now live on five airlines, including Delta Airlines, American Airlines, Japan Airlines, Japan Transoceanic Air and GOL.
- Business Aviation surpassed 5,000 ATG active aircraft.